Franchising offers a middle ground between starting a business from scratch and buying an established company. With a proven system, brand recognition, and ongoing support, franchises boast significantly higher success rates than independent startups — but they come with substantial investment requirements and ongoing fees.
These statistics reveal a $936 billion US industry where 92% of franchises survive their first two years, owners earn an average of $103,000 annually, and McDonald's alone generates $131 billion in global sales.
Key Takeaways
- The US franchise industry generates $936.4 billion in economic output
- 92% of franchises survive after two years (vs. 50% of startups)
- Average franchise owner earns $102,910 annually
- Franchising employs over 9 million workers in the US
- Quick-service restaurants dominate with $250B+ in annual revenue
- McDonald's is the largest franchise with $130.7 billion in global sales
How Much Is the Franchise Industry Worth?
1. The US franchise industry generates $936.4 billion in total output
According to the International Franchise Association (IFA), franchise output is projected to grow 4.4% in 2025, up from $896.9 billion in 2024. Franchising continues to outpace the broader US economy.
2. There are 851,000 franchise establishments in the US
The number of franchise units increased by more than 20,000 (2.5%) in 2025. This growth comes despite economic uncertainty, with franchises adding 2.4% compared to the broader economy's projected 1.9% growth.
3. The global franchise market is valued at $146 billion in 2025
The global market is projected to reach $369.84 billion by 2035, growing at a 9.73% CAGR. International expansion is accelerating as brands capitalize on emerging markets with appetite for Western brands.
4. Quick-service restaurants generate $250+ billion annually
QSRs are the largest segment in franchising, with over 300,000 units nationwide. The quick-service burger segment alone brought in $202 billion last year, making it by far the largest category.
What Is the Success Rate of Franchises?
5. 92% of franchises are still in business after two years
Compared to independent startups where nearly 50% fail within five years, franchises offer significantly better odds. The one-year success rate for new franchises is 6.3% higher than for independent businesses.
6. 85% of franchises survive after five years
Only about 4% of franchises fail within the first five years. This is dramatically better than the general small business failure rate, largely due to proven systems, brand recognition, and franchisor support.
7. 93% of franchisees report profitability
According to industry surveys, the vast majority of franchise owners operate profitable businesses. High profitability is attributed to comprehensive startup packages that include training, marketing support, and proven operational systems.
8. Low-cost franchises (under $25,000) have 9.3% failure rate
According to Entrepreneur's data, franchises with initial investments above $25,000 typically maintain failure rates below 5%. Lower-investment franchises attract less-capitalized, less-experienced owners, contributing to higher failure rates.
Key Insight: 72% of small business owners considering franchise ownership cite reduced risk and proven systems as their primary motivation.
How Much Do Franchise Owners Make?
9. The average franchise owner earns $102,910 annually
According to a Franchise Business Review survey of 38,000 franchisees, owners in business for more than two years earn an average of $115,688 — 12% more than newer franchisees.
10. Multi-unit operators average $142,000+ annually
Franchise income scales significantly with expansion. Those who grow to five or more units can earn over $214,000 per year, demonstrating the wealth-building potential of multi-unit franchising.
11. Only 7% of franchise owners earn more than $250,000 annually
While high earnings are possible, they're not the norm. At the other end, 51% of franchise owners earn less than $50,000 annually. In the food franchise sector specifically, 41% earn under $50,000 per year.
| Industry | Median Income |
|---|---|
| Insurance | $169,535 |
| Food & Beverage (Overall) | $130,000 |
| Manufacturing | $123,881 |
| Hotels & Travel | $120,519 |
| Quick-Service Restaurants | $82,000 |
12. Insurance franchise owners earn the highest median income at $169,535
Industry selection significantly impacts earnings. Manufacturing ($123,881), hotels & travel ($120,519), and management consulting ($118,732) round out the top-paying franchise categories.
13. There are 712,274 franchise owners in the US
The franchise owner demographic skews male (69%) and averages 44 years old. Women own 31% of franchises, a number that's been steadily increasing over the past decade.
How Much Does It Cost to Start a Franchise?
14. The average franchise development budget is $1.02 million in 2025
This represents a 39% increase from 2024, though costs vary dramatically — from $500,000 for simple service concepts to over $2 million for complex retail operations, and $5 million+ for hotels.
15. Initial franchise fees typically range from $10,000 to $50,000
This one-time fee grants access to training, branding, and support resources. QSR fees typically run $20,000-$30,000, while established brands like McDonald's can charge over $100,000.
16. Ongoing royalties average 5-6% of gross revenues
Beyond the initial investment, franchisees pay ongoing fees — typically 4-8% of gross revenues as royalties, plus 2-4% for marketing and advertising funds. The average franchise contract runs 10-20 years.
| Franchise Type | Total Investment Range |
|---|---|
| Home-Based | $10,000 - $50,000 |
| Professional Services | $50,000 - $150,000 |
| Retail | $100,000 - $300,000 |
| Quick-Service Restaurant | $250,000 - $1 million |
| Full-Service Restaurant | $750,000 - $3 million |
| Hotel | $5 million+ |
What Are the Largest Franchise Brands?
17. McDonald's is the world's largest franchise with $130.7 billion in sales
With 43,477 stores worldwide, McDonald's increased unit count by 1,655 in 2024. The company's brand value is $38 billion — second only to Starbucks among restaurant brands globally.
18. The Top 400 franchises generated $738.5 billion in 2024
According to Franchise Times, the 10 largest franchised brands alone account for more than $408 billion in annual sales — 55% of the Top 400's total revenue.
| Franchise | US Systemwide Sales | Units |
|---|---|---|
| McDonald's | $53.5 billion | 14,000+ |
| Starbucks | $29.3 billion | 16,000+ |
| Chick-fil-A | $21.6 billion | 3,000+ |
| Subway | $10.8 billion | 36,502 |
| Dunkin' | $9.2 billion | 9,500+ |
19. Subway has 36,502 locations but sales declined 1.4%
Despite having the most US locations, Subway's sales dropped to $17 billion in 2024 with 631 net unit closures. The brand was acquired by Roark Capital for $9.5 billion in a major private equity deal.
2025 Franchise 500: Entrepreneur's top 5 franchises for 2025 are Taco Bell, Jersey Mike's, Dunkin', Popeyes Louisiana Kitchen, and Ace Hardware.
How Many Jobs Does Franchising Create?
20. Franchising employs over 9 million workers in the US
In 2025, franchising is expected to add approximately 210,000 jobs, growing at 2.4% — faster than the broader US economy's 1.9% projected growth rate.
21. Quick-service restaurants employ 4 million+ franchise workers
QSRs are by far the largest source of franchise employment. Other major employers include retail (1.2 million), full-service restaurants (1.1 million), and lodging (728,000 workers).
22. Franchise employment accounts for 5.8% of the US workforce
The Southeast has the highest concentration, with South Carolina leading at 8.8% of workers employed by franchises. Georgia (7.1%), Idaho (6.8%), and Louisiana (6.7%) follow.
23. 80% of franchisors have unfilled job vacancies
According to the IFA's 2024 Franchisor Survey, labor remains a challenge. 34% of franchisors cite cost and quality of labor as their biggest business challenge.
Why Do Companies Choose to Franchise?
24. Franchising enables rapid expansion without corporate capital
Franchisors can grow their brand nationwide using franchisee investment rather than corporate funds. This asset-light model allows faster scaling while shifting real estate and operational risk to franchisees.
25. 74% of S&P 100 companies rebranded within their first seven years
Many major corporations started as franchises or use franchising for distribution. The model provides proven systems that franchisees can replicate, reducing the learning curve for new business owners.
26. Franchisors benefit from economies of scale
Bulk purchasing power reduces supply costs across the network. Shared marketing expenses keep per-unit costs down. Franchisors generate recurring revenue through royalties while franchisees handle day-to-day operations.
Private Equity Interest: Major deals include Roark Capital's $9.5 billion Subway acquisition and Restaurant Brands International's $1 billion Firehouse Subs purchase — showing investor confidence in the franchise model.
What Are the Fastest-Growing Franchise Sectors?
27. Personal services franchises are growing fastest at 4.3%
This sector includes beauty, wellness, fitness, pet care, and childcare. Consumer demand for convenience and specialized services is driving unprecedented growth in these categories.
28. Health and wellness franchises are expanding beyond traditional gyms
Consumers are investing in holistic health, massage, chiropractic services, spa treatments, and alternative therapies. This sector shows consistent growth as health consciousness increases.
29. Senior care franchises are experiencing explosive growth
The aging Baby Boomer generation is driving demand for in-home care, companionship, and assisted living services. This demographic shift creates long-term growth opportunities in eldercare franchising.
30. Pet services franchises benefit from "pet as family" trends
With pet ownership rising and owners treating pets as family members, franchises offering grooming, boarding, training, and specialty foods are expanding rapidly with strong recurring revenue streams.
Which Regions Are Growing Fastest?
31. The Southeast leads franchise growth at 6.2% output increase
Business-friendly policies and lower cost of living are driving franchise expansion in the Southeast. The Southwest follows with 8.5% growth, outpacing all other regions.
32. Georgia, North Carolina, and Virginia are the top 3 growth states
The 10 fastest-growing states for franchising are: Georgia, North Carolina, Virginia, Arizona, South Carolina, Pennsylvania, Tennessee, Florida, Colorado, and Maryland.
| State | Franchise Workforce % |
|---|---|
| South Carolina | 8.8% |
| Georgia | 7.1% |
| Idaho | 6.8% |
| Louisiana | 6.7% |
| National Average | 5.8% |
33. Canada is the world's second-largest franchise market at $120 billion
Franchising is the 12th largest contributor to Canada's GDP. India's franchise industry is worth $50.4 billion, growing 30-35% annually. The Middle East sector has a net worth of $33 billion.
What Trends Are Shaping Franchising in 2025?
34. Multi-unit franchising is accelerating
Entrepreneurs increasingly prefer owning multiple locations for stability, profitability, and economies of scale. Multi-unit ownership enables streamlined operations and centralized management across locations.
35. Technology adoption (AI, automation) is driving efficiency
Franchises are adopting AI, automation, and digital platforms to improve operations, reduce labor costs, and enhance customer experience. Technology is becoming a key differentiator.
36. Sustainable and green franchises are gaining rapid adoption
Eco-conscious consumerism has gone mainstream. In 2025, franchises emphasizing sustainability, health-consciousness, and environmental responsibility are witnessing accelerated growth as consumer values shift.
Summary
Franchising in 2025 represents a $936 billion industry with 851,000 US locations employing over 9 million workers. The model offers compelling advantages: 92% of franchises survive two years (vs. 50% of startups), average owner income of $103,000, and proven systems that reduce risk.
However, success isn't guaranteed. Half of franchise owners earn under $50,000, initial investments can exceed $1 million, and ongoing royalties of 5-6% cut into margins. The key is choosing the right brand, industry, and location — with personal services, health/wellness, and senior care among the fastest-growing sectors for 2025.
| Metric | Statistic |
|---|---|
| US Industry Output | $936.4 billion |
| Total US Locations | 851,000 |
| 2-Year Survival Rate | 92% |
| Average Owner Income | $102,910 |
| US Franchise Jobs | 9+ million |
| Largest Franchise (McDonald's) | $130.7B sales |
| Average Royalty Rate | 5-6% |
| Industry Growth Rate | 2.4% |
Sources
- International Franchise Association - 2025 Economic Outlook
- Franchise Business Review - Franchise Owner Income
- Franchise Times - Top 400 Franchises 2025
- Franzy - Franchising Industry Statistics 2025
- Entrepreneur - Franchise 500 Rankings
- HigherVisibility - Franchise Statistics 2025
- Passive Secrets - Franchise Statistics & Facts